AutoLoadMAX – Speed and Simplicity Create a Breakthrough for Cellular Phone Customers
Often it is the simple idea that challenges established methodologies. In the telecommunications business, calling cards are the standard medium of exchange. Globe Telecom's simple idea turned that model upside down by offering air-load capability in any denomination. The Philippine telecommunications giant is now reaping large rewards from the idea and its innovative technology implementation.
Globe Telecom is one of the top three telecommunications companies in the Philippines. The Philippines is an interesting study in telecommunications; its land-line infrastructure is "massively underutilized" because of a largely unexpected and extremely competitive mobile telephony market boom. This explosion is tempered with economic realities; the GNP per capita is 12% of the United States and many people live day-to-day with just the money in their pocket. For many Filipinos, neither a monthly subscription for cell phone usage nor saving money to purchase prepaid calling cards fits their lifestyle or purchase patterns.
AutoLoadMAX – Meeting Customers' Needs
[Old French, diminutive of sac bag]
1: a small bag or packet
2: a small bag containing a perfumed powder or potpourri used to scent clothes and linens
This combination of cellular popularity and cost-conscious buying patterns created unique market opportunities. Rodell Garcia, the CIO of Globe Telecom explains, "In the Philippine market there is what we call ‘sachet marketing'. People only buy the amount they need. So, for example, with shampoos, people don't buy the big bottles, they buy small packets and only use one packet a day. Similarly, with our Globe AutoLoadMAX solution, people can buy airtime value in small packets. You could call it ‘just-in-time buying.'"
Typically, calling cards use denominations of 15, 30, 100, 150 pesos, and up. The people at Globe Telecom came up with a unique idea: dispense with the calling card model and make it easy for customers to reload their phones – in any denomination. In their view, there is no reason limit the purchase options by only allowing consumers to spend pre-determined amounts.
Unparalleled Retailer Network
From the consumer's point of view, the key to sachet marketing is accessibility that is both ubiquitous and instant. Over 800,000 retailers cover the country and provide access to Globe's airload capabilities. Rodell Garcia says, "Subscribers will select the carrier based on where they will easily be able to get airtime and airtime load." Each retailer has a phone with their retailer identification, and the phone contains a secure SIM with an embedded application that guides the transaction.
There is a low barrier to entry for retailers because the back-end systems manage the details of the transactions. To support 800,000+ retailers, the application had to be simple and easy to use, and retailers needed to have a strong financial incentive. Rodell Garcia explains how the retailer plan was structured for mutual success, "Our retailers are scattered all over the country. They each have a sign that says "Globe AutoLoadMAX," so in the urban areas you find it on almost every block; in the rural areas you'll find it in small mom-and-pop convenience stores. The retailer margins are very good at 14% so it's a nice revenue stream. Even individuals are involved, if you have a good location where there's a lot of pedestrian traffic, you put up a sign and you're in business. So given this profile, you can imagine the system has to be extremely easy to use."
The retailer network depends on the concept of virtual wallets. Simply described, the subscriber on the street hands the retailer cash to top off their account, the retailer takes a few seconds to send an SMS (short message service) text message to AutoLoadMAX that then moves the specified amount between the retailer's and subscriber's virtual wallets. The retailer clears 14% on the transaction and the subscriber's phone account is now infused with the funds that moments ago existed as cash in their pocket.
The marketing message is simple and easy to convey to a broad population. Garcia explains, "One of our ads illustrates the concept. In it there is this guy who wants to buy 17 pesos of airtime value. He goes to the AutoLoadMAX retailer on the street. Then he remembers ‘Oh, I need to send a text message to my girlfriend, I want a little more.' Then he adds one more person and realizes that after he uses it he won't have any more money for the month. He then adds a little more because, ‘I have to ask my mom to send me more money.' It's a funny ad and the message illustrates the flexibility of the service."
Short Message Service (SMS) – Inexpensive and Popular
Filipino cost consciousness is also manifested in the way they utilize their cell phones. Cell phone SMS is affordable and extremely popular. SMS messages are limited to 160 characters and cost just 1 peso ($.02 US) to send. SMS is a driving factor in the success of AutoLoadMAX because those small denominations of a few pesos –using SMS– can finance several complete messages to friends and family.
SMS is not a substitute for email, but it distinctly has a place in the hearts of Filipinos. Garcia says, "SMS has its limitations. In a regular phone you can only put in 160 characters, which is far less than you usually put in email. That said, people have developed their own language using SMS because of the restrictions on message length. Additionally, SMS is very cheap and people tend to use SMS a great deal."
In fact, SMS is so popular that Globe Telecom often moves 200 million or more SMS text messages per day through its network. On holidays the volume can reach half a billion. The ability to easily use whatever funds are available, in any denomination, to add to the airtime balance of a phone is highly differentiating for Globe Telecom.
Sybase ASE – Handling the Load
Sybase Adaptive Server Enterprise (ASE) is behind the scenes, powering the system, moving pesos from retailer wallets to subscriber wallets and updating accounts as the minutes are used and text messages are sent. AutoLoadMAX is a J2SE application residing on an HP-UX Superdome system running ASE. Globe Telecom is in the process of migrating systems to ASE 15.
This revolutionary model of broad retailer accessibility, coupled with the ability to top off phone accounts in small denominations, generates enormous traffic volumes. Additionally, to encourage retailer engagement, the fund transfer message is free to the retailer. This means the system must handle heavy loading very efficiently as there is a small profit margin with a critical dependency on volume.
Garcia explains how simple is not always easy, "Ironically, by simplifying the design of our system we were able to gain much more flexibility. But once you've gotten to our level of detail with the denominations, the performance requirements on our system increase dramatically." If the system could not keep up, if there were delays or dropped transfers, both retailers and subscribers would quickly get frustrated and abandon the service.
Globe Telecom has used Sybase ASE for its billing systems for several years. When working with an Australian company to develop the AutoLoadMAX application, Globe Telecom specifically requested the application be built with ASE. Rodell Garcia remembers his early discussions with that company, "Their first proposal to us had them using a different database, but we preferred ASE. Our experience with the ASE system has been very good – the database is extremely reliable and has a very small footprint, it is not resource hungry and yet it's able to cope with the large volumes. Our people had experience in using ASE and we're using it for our billing systems. We also have very good support coming from our local Sybase team. We were clear that Sybase ASE should be the database engine for AutoLoadMAX."
To protect this valuable application, Sybase Professional Services is working with Globe Telecom to implement Sybase Replication Server to provide redundancy. In addition to redundancy, the secondary site will also act as a reporting server. This ability to double as a reporting site is an important collateral benefit of Replication Server; it enables extensive analysis and reporting functions to run without causing any degradation to the production systems or to the customer side of the service.
Wildfire Adoption is Proof of Success
This simple idea – and clever marketing - created a sensation. Rodell Garcia recalls the initial launch, "We started the Globe AutoLoadMAX service a few years back with a very small base. The growth has been tremendous; we now have 13 million subscribers and 80% of our prepaid subscriber base has become dependent on using the AutoLoadMAX service to top up their airtime load. That's a big volume. During our peak period we would get as much as 200,000 retailer requests in the system each hour.
Innovative. Efficient. Successful.
Globe Telecom was the agent of a sea change, Garcia sums it up, "The unique thing about AutoLoadMAX is the flexibility for our subscribers to top up only to the extent they want to top up, without us losing money in the process. Even when other telcos are doing over-the-air loading, it was still rooted in the calling card model where you have a limited set of denominations. With AutoLoadMAX we broke the calling card model." By rethinking the model and employing Sybase technology, Globe Telecom has created something simple, effective, and exceptionally successful.